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PP RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
RUEHLZ RUEHNP RUEHPOD RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHVB #0003/01 0071519
ZNR UUUUU ZZH
P 071519Z JAN 09
FM AMEMBASSY ZAGREB
TO RUEHC/SECSTATE WASHDC PRIORITY 8893
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY

UNCLAS SECTION 01 OF 02 ZAGREB 000003 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON HR
SUBJECT: OFFICIAL DATA SHOW RISE IN CROATIAN TOURISM FOR 
2008; UNOFFICIAL SUGGEST OTHERWISE 
 
¶1. (U) Summary: According to official statistics, Croatia saw 
a 1.9 percent rise in the number of visitors for the 2008 
season, but anecdotal evidence from businesses suggests the 
statistics may not be entirely accurate and there may already 
be a significant downturn in this critical industry. 
Regardless of the results of the 2008 season, the GOC and the 
industry are bracing for a weaker season in 2009, hoping at 
least to maintain 2008 levels through stepped-up promotional 
campaigns. Tourism is, by most accounts, the most important 
industry in Croatia. The willingness of tourists to return in 
large numbers next summer in the face of an economic crisis 
will be a key factor in determining Croatia's success or 
failure in weathering the economic challenges ahead. End 
summary. 
 
¶2. (U) According to data from the Croatian Bureau of 
Statistics (CBS), Croatia again saw a rise in tourism for the 
2008 season. Comparing January through August 2007 to the 
same period in 2008, the number of tourists rose 1.9 percent 
to 9.2 million and overnight stays rose 2.6 percent to 48.7 
million. As in 2007, Germany sent the most visitors, followed 
by Italy, Slovenia, Austria, and the Czech Republic. However, 
with the exception of Slovenia, which showed a 3 percent 
increase, these top five source countries did not contribute 
to the overall rise in number of tourists, as their numbers 
stayed the same or fell compared to 2007 levels. The number 
of the visitors from the U.S. fell from 119,500 in 2007 to 
108,300 in 2008, a 9 percent drop. Regarding destinations 
within Croatia, the coastal areas continued to draw the most 
tourists, but many inland counties also saw an increase in 
visits. Reflecting the continued popularity of the coast, the 
number of cruises stopping in Croatian ports increased from 
390 to 540 (39 percent) and the number of passengers 
increased from 436,200 to 621,500 (43 percent). 
 
¶3. (SBU) Some have questioned whether the CBS data accurately 
portray the 2008 tourism season. The CEO of Adriatica.net, 
Croatia's largest tour operator, responsible for one third of 
bookings in the country, told us that the rise in the raw 
number of tourists is probably accurate, but that fewer 
tourists are staying in hotels, opting instead for bookings 
in private homes. According to him, this change in travel 
patterns is the result of poor development and organization 
in the sector and caused a drop in overall revenue from 
tourism. Charlotte Ruhe, director of the Croatian Office of 
the European Bank for Reconstruction and Development (EBRD), 
told us she did not believe the official statistics either 
and thought the strong numbers reflected methodology choices 
more than the true situation. The hotels EBRD supports 
reported throughout the season that overnight stays were down 
from 2007 levels. Raising other questions about tourism's 
economic impact, recent analysis by the Croatian Institute 
for Tourism suggests the industry may be responsible for 10 
percent of GDP rather than the 20 percent usually cited. Even 
at 10 percent, however, tourism forms a larger part of GDP 
than in other European tourist-destination countries, such as 
France, Austria, and Slovenia. 
 
¶4. (U) Even the overall positive CBS data showed a turn for 
the worse into the fall. Compared to September 2007, the 
number of tourists dropped 6 percent and overnight stays 
dropped 2 percent. Although October again showed increases, 
both the government and the industry are bracing for the 
effect of the global economic slowdown on the 2009 season. In 
November, Minister of Tourism Damir Bajs announced he would 
double the advertising budget. Milo Srsen, assistant director 
of the Croatian Tourism Association, told us the goal for 
2009 is to prevent a drop in tourist visits or perhaps 
achieve a 1-2 percent increase. As about 80 percent of 
tourism in Croatia is by foreign visitors, promotion efforts 
will focus on foreign markets, particularly those within 
driving distance of Croatia. Since 2000, Croatia has been 
working to move from a focus on mass tourism to more higher 
end -- and hopefully higher profit -- offerings. So far, the 
Ministry of Tourism has not suggested it will change that 
strategy in response to the economic situation, and it also 
publicly denies the sector will cut prices for the 2009 
season. 
 
¶5. (U) Comment: Regardless of its exact share of GDP, tourism 
is critical to Croatia's economy. In particular, it is a 
significant source of export revenues, in a country that saw 
a 17 percent increase in its already large trade deficit 
during the first ten months of 2008. With little indication 
other industries can do much to boost exports, a drop in 
tourism in 2009 would have a noticeable effect on the 
economy. However, preventing a drop may require more than 
stepped-up advertising. If tourism does prove vulnerable to 
the global economic slowdown, as most expect it will, it will 
reinforce the message that Croatia should strengthen other 
sectors of the economy to reduce its heavy reliance on 
 
ZAGREB 00000003  002 OF 002 
 
 
tourism. End Comment. 
BRADTKE